Jimmy Deenihan
Ceist:56 Mr. Deenihan asked the Minister for Arts, Sport and Tourism the actions he intends to take to restore the competitiveness of tourism here; and if he will make a statement on the matter. [31546/04]
Amharc ar fhreagraWednesday, 1 December 2004
Ceisteanna (30)
Freagraí ó Béal (3 píosaí cainte)
There is widespread agreement that the main challenge for our tourism industry is to restore the competitiveness that Ireland enjoyed in the boom years of the 1990s. I have outlined clearly on more than a few occasions my views that it must be addressed in a number of ways: first, through a concerted focus by the industry on improving its capability and performance in areas such as quality assurance, productivity enhancement, cost and yield management, use of new information and communication technologies and adoption of best human resource practices — Fáilte Ireland is working to support the industry in this regard; second, through attractive price and discount offers, imaginatively packaged and marketed to the customer, of which there are many recent examples; and, third, with the Government facilitating the development of the tourism industry through a range of macro-economic and other policies that will enhance the business environment for the sector, in particular, by improving competition and moderating taxes and charges for public services.
Competitiveness is a function of the overall Irish tourism experience for customers relative to other competing locations. As I indicated previously, my contribution towards the restoration of competitiveness is to see a coherent tourism action plan implemented effectively in co-operation with all the major players. To this end, I have established a high level implementation group to advise and assist in driving forward and monitoring the comprehensive action plan set out in the report of the tourism review group. I received the first progress report from the implementation group at the end of August. Few people involved in the industry were surprised to learn that the group found that strong areas of concern remain in relation to the competitiveness and value for money available in wide segments of Irish tourism.
On 17 November last, at my invitation, the implementation group organised the first annual forum of the tourism industry, one of the recommendations arising from the New Horizons report. The purpose of the forum was to report to the industry on progress to date on the implementation of the new tourism strategy and to consider developments in the tourism sector. It also provided representatives of the industry with the opportunity to advise the implementation group and the Government of its views on the current status of the industry.
One of the key outcomes of the forum was the reaffirmation that, collectively, we must get the industry back on a sustained course of renewed growth to achieve the ambitious targets that have been set by the review group. I understand the level of debate and participation in the working groups was excellent and I believe there is a renewed confidence and commitment to take the steps necessary to further develop the sector and to address the challenges that lie ahead.
To date in 2004, we have seen an increase of just 2.8% in tourist numbers — the expected increase was approximately 4% to 5% — and tourist numbers are expected to double by 2011, but there must be something wrong if the number of tourists coming here from the United Kingdom is down 7% over the September figures for 2003. It is not only those in the tourism industry who must become competitive. The tourism industry generally is very competitive but the Government, through its indirect and stealth taxes, is forcing up prices and making Ireland less competitive. For example, Ireland has the second highest VAT rate on accommodation in the eurozone, at 13.5%. It has the second highest VAT rate on meals in the eurozone. Excise duty on wine is the highest in the eurozone and excise duty on sparkling wine is the highest in the world. We have the second highest beer excise duty in Europe behind Finland and it is approximately ten times the Spanish level. Stealth taxes, such as ESB charges and other energy costs, have increased by approximately 30% in the past four years. Because of the underfunding of local authorities, those in the tourism industry also have to pay high commercial rates, water and refuse charges.
Will the Minister agree that the reasons for upward pressure on pricing in the tourism industry are mainly Government taxes and Government inaction in this area? I accept the Minister has done his bit by setting up the tourism review group but he must admit that the reason for the upward spiral in prices and the lack of competitiveness is our taxation system as it applies to the tourism industry.
As I said, it is the function of everybody to tackle the competitiveness issue and it is not today or yesterday that I highlighted the need for our industry to give value for money. I am pleased that the industry has responded in several respects. Among the main contributors to inflation in the past five years have been restaurants and pubs, alcohol and tobacco, recreation and culture, and food and non-alcoholic beverages. The average price of Irish goods and services has increased well beyond the increases experienced by our trading partners. Value for money for overseas holiday visitors in terms of satisfaction has declined by approximately 22% over three years. This is due, primarily, to sharp drops in British and North American perceptions.
What should be stressed in response to Deputy Deenihan's charges against the Government is that we have a relatively high wage, low tax economy in terms of income tax. There is a difficulty with the value of the euro against the dollar and sterling. The US dollar has declined against the euro and, in tandem, the euro has strengthened against both sterling and the dollar over the same period.
We did not experience the growth we targeted for the year in the order of 4%. However, in a year when, internationally, experiences were not great in the industry, it is heartening that our share of the market increased by 2% plus. Increased access from the Continent and, it is hoped, the United States of America, will drive the figures upwards. That is something which, as the Deputy is aware, the Government is examining carefully. In that context, the decision by Ryanair to add nine routes from Shannon is particularly welcome and I look forward to improving access from the United States of America to further improve the figures. I believe we will achieve the target of increasing the number of visitors between now and 2012 from 6.1 million to 10 million.